DSA Factors

What is Accounts Receivable Factoring?

Invoice Factoring, also known as "Accounts Receivable Financing", is when you sell your accounts receivable to another company.

Invoice factoring is simply selling your accounts receivable (or invoices) to another company known as a "factor". Often times this is known as accounts receivable financing. If you offer terms to your customers, whether they are net 30 days or longer, then you are an ideal candidate for invoice factoring.

When you factor your receivables you sell them at a discount and in exchange DSA will advance you funds for them that same day. DSA will also handle all of the collection work for you, and our non-recourse factoring means that your receivables are insured if one of your customers can't pay for financial reasons.

DSA offers its clients a low flat rate fee for its invoice factoring services. While other companies may offer incredibly low rates for their services, they will charge you interest for the amount of time it takes them to collect and for the funds to clear the bank. At DSA we will never charge you any interest no matter how long it takes your customers to pay, when you work with DSA you know exactly how much you will have to pay.

Invoice factoring is not a loan, and you will not assume any debt by factoring your invoices. Therefore, there is no lengthy application process, and approval is based on your customers credit and ability to pay rather than your own.

When you factor with DSA you also can rest assured that you will get paid for your invoices. You no longer need to subscribe to credit agencies, DSA will do all of the credit checking for you, most of the time we are already familiar with your customers and have established a line of credit for them.

Since we handle all of the collection work, you no longer need to worry about making collection calls. Furthermore, since DSA factors for a large number of companies, we have much more leverage in collecting than you would on your own. If a customer doesn't pay you then they simply need to find a new vendor, if they don't pay DSA they may need to find 5, 10, or even 20 new vendors.

How Invoice Factoring Works

3 Simple and Easy Steps

Step 1

Approval Request

Request credit approvals online

Submit your orders for approval here on our web site. Most orders are approved instantly online, but for those that aren't we will try to get back to you within 30 minutes. We never look for a reason to turn down your accounts, instead we look for reasons to approve them. We are very proud that our approval rate is over 95%.

Step 2

Ship & Invoice

Ship and invoice your customer

Once you have an approval number you can go ahead and ship out the merchandise or perform the service. At the same time you should send us a copy of the invoice and backup documents. You will also need to send an invoice to your customer with our assignment stamp on it.

Step 3

Relax!

Get funded by DSA Factors

As soon as DSA receives the invoices we will process them and send you the funds within 24 hours. DSA fully manages the receivables including making the collection calls and supplying you with weekly aging statements of your accounts. Our non-recourse factoring means that you are not responsible if a customer can't pay for financial reasons.

Key Benefits of Accounts Receivable Factoring

Accounts receivable factoring can help companies of all sizes, from start-ups to mature companies:

  • Improve cash flow
  • Eliminate bad debts
  • Reduce operating expenses
  • Expand working capital financing
  • Improve management information
  • Eliminate the need for bank loans or SBA loans
  • Alleviate time consuming activities such as credit checking, bookkeeping, and collections

Additional benefits you receive when you factor your receivables with DSA Factors:

  • We have worked with numerous types of businesses over the past 30+ years!
  • Funding within 24 hours!
  • Credit Approvals in as little as 30 minutes!
  • Generous credit limits!
  • No minimum factoring requirements!
  • No long term commitment!
  • With our flat rate fee, you never have to pay any interest!
  • With our spot factoring program you don't need factor all of your receivables!

Companies that can benefit from invoice factoring include those that are:

  • Rapidly growing
  • Seasonal
  • Start-ups
  • Undercapitalized
  • Spin-offs
  • Concerned about adding fixed costs
  • Have a lengthy manufacturing cycle
  • Strained by slow turnover of receivables
  • Hurt by high bad debt losses
  • Saddled with a large customer concentration

Reasons you should consider invoice factoring:

  • Unlimited Capital
  • Elimination of bad debt
  • Leverage off your customers' credit
  • Factoring is fast and easy
  • No debt incurred
  • Offer credit terms to your customers
  • Establish good credit for your business
  • Professional collections

Let us answer your questions regarding the essential benefits of our accounts receivable funding and cash flow financing program, including all costs and ease of start-up. At DSA you can always speak with a principal, we will never hand you over to an account manager. You can try us out with no long term obligations, so call today.

In addition to accounts receivable factoring, DSA Factors also offers purchase order financing to our clients.

Invoice Factoring versus a Bank Loan

Accounts receivable factoring is not a bank loan.

Below is a quick look at how accounts receivable financing differs from a bank loan

Non-Recourse vs Recourse Factoring

There are two different types of factoring, you can either factor with or without recourse.

DSA Factors is proud to offer Non-Recourse Factoring to our wholesale clients.

Below is a description of the difference between the two options.

Non-Recourse Factoring

With non-recourse factoring you aren't just speeding up your cash flow and outsourcing your accounts receivable, but you are also insuring your accounts receivable.

In a perfect world when you invoice a customer they would pay you when the invoice is due. While many of your customers do this, unfortunately we all know that this isn't always the way it works. Sometimes one of your customers might go bankrupt or out of business and are unable to pay their bills. Other times you might just have a customer who is a deadbeat and doesn't pay anyone. While we do track the credit of all of your customers, and look at payment trends as part of our approval process, sometimes we will approve a customer who isn't able to pay. When this happens it is good to know that we take full responsibility for the receivables. Even if we never get paid on an invoice, you still get to keep the funds that you received.

While there are plenty of companies out there who offer insurance on your receivables, most of them won't approve any companies that aren't a sure bet. That means, unless your customer's name is Walmart, they won't offer you insurance. At DSA Factors we understand that simply approving the Walmarts isn't enough. We will insure everyone from big to small, online or brick and mortar, American or Canadian. We have an over 95% approval rate and are very proud of that. It would be very hard to find an insurance company, or even another factoring company, with an approval rate that high.

Recourse Factoring

With recourse factoring you still get improved cash flow and are still outsourcing your accounts receivable, but you do not get the insurance that is included with non-recourse factoring.

Factoring with recourse will still provide you with cash flow, but it won't provide you with a safety net in case one of your customers doesn't pay. Typically when you factor with recourse, if an invoice becomes 90 days past due, the invoice will be charged back to you.

While we will always do continuing credit checks and monitor payment trends for your customers, no one is perfect and every now and then a company who may not be able to pay will slip through the cracks. While your factoring company will still work hard to get your customer to pay, sometimes there isn't a whole lot you can do when a business files for bankruptcy or closes up. Unfortunately when this happens and a company is unable to pay, if you are factoring with recourse this becomes your responsibility, and you may be asked you to buy back the invoices.

Typically companies in the service industry receive recourse factoring. And while these companies may not receive the same insurance that companies selling merchandise receive, DSA Factors will work very hard to make sure that all of their invoices get paid. Charging back an invoice to a client is not something that is taken lightly, it is something that happens less than a third of a percent of the time.

Contact Us Today

DSA Factors - Money to Make Your Company Grow!

PO Box 577520
Chicago, IL 60657

 773-248-9000

 773-248-9005

 info@dsafactors.com

 

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DSA Factors
International Factoring Association